- The SPY and VOO stock prices continued their downtrend.
- The Fear and Greed Index dropped to the extreme fear zone.
- Technical analysis suggests that the S&P 500 Index may continue falling.
The SPY and VOO stocks continued their strong downward trend, as the S&P 500 and top US indices, such as the Dow Jones Industrial Average and the Nasdaq 100, also plunged. SPY dropped to $635, while VOO fell to $583, down by 8.85% from the year-to-date high.
VOO and SPY Stocks Drop as the Fear and Greed Index Sinks
The S&P 500 Index continued to fall as investors embraced risk-off sentiment. Data shows that the Fear and Greed Index sank to the extreme fear zone of 10. All sub-indices in this index dropped to the extreme fear zone, the worst performance since April last year, when President Donald Trump announced his trade war.
The ongoing fear is reflected in their inflows and outflows. Data shows that the VOO ETF has shed over $34 billion this week, the worst performance this year. This outflow brings the total inflow this year to over $21 billion.
The SPY ETF added $7.4 billion this week, offsetting the substantial outflows it suffered this year. It has lost $30 billion since January, continuing a trend that began last year, when investors moved to SPYM and VOO, which have lower expense ratios.
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The US stock market is slumping amid concerns about the ongoing US-Iran war, which started late last month. There are signs that the war is escalating, with the US planning a ground invasion. As a result, crude oil prices have continued soaring, with Brent rising to over $100. US gasoline and diesel prices have continued rising.
The main economic risk is that the US has moved into stagflation, a situation characterized by high inflation and slow economic growth. The OECD expects US inflation to jump to 4.3% this year. The labor market has stalled, with the economy shedding over 92,000 jobs in February.
Therefore, the Federal Reserve is in a bind, as cutting rates will lead to higher inflation. Hiking rates will slow the American economy. These metrics explain why US bond yields continue rising.
Meanwhile, the SPY and VOO stocks are plunging as investors assess other industries. There are concerns that the AI bubble may burst soon, while the private credit industry is sending shivers among investors. Many investors have started pulling money from these funds, pushing their stocks lower.
The top laggards in the S&P 500 Index included Datadog, Norwegian Cruise Line, Coinbase, Align Technology, Airbnb, and Robinhood Markets. Coinbase and Robinhood dropped because of the ongoing crypto market crash.
VOO Stock Price Technical Analysis
The three-day chart shows that VOO stock has slumped from a record high of $640 to its current price of $583. This retreat happened after the fund formed a rising wedge pattern, a common bearish reversal sign in technical analysis.
It has now dropped below the 50-day moving average. Notably, it has now settled at the 100-day moving average, which is an important support level. The Relative Strength Index (RSI) has dropped and is nearing the oversold level.
Therefore, the most likely VOO ETF forecast is bearish, with the next important target being at $500. This retreat will continue as long as the ongoing war remains. In the future, however, the fund will rebound as investors buy the dip.
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